SINGAPORE - Countries in the region read it as a good sign that both the United States and China say that the broad Pacific Ocean is "vast enough" to embrace both powers.
But this is provided that their notion of "vast enough" does not mean the Pacific Ocean can be carved up into two spheres of influence - a scenario which would only "circumscribe options for other countries and increase the risk of rivalry and conflict between the two power blocs," Prime Minister Lee Hsien Loong said on Friday.
Rather, "vast enough" should mean that "there is space all over the Asia-Pacific region for both powers to participate and compete peacefully, and to work out problems constructively, without raising tensions," he said.
Delivering the keynote address at the annual Shangri-La Dialogue security summit, PM Lee noted that competition is inevitable with two Pacific powers, and sketched out a preferred approach in which the powers strengthened their influence within a set of international rules and norms.
Unlike the relationship of old between the US and the former Soviet Union, the US-China relationship is not a zero-sum game, he emphasised, adding that no Asian country wants to choose between the two.
Speaking to an audience of top defence and security officials from the US, China, Japan, India and other Asia-Pacific and European countries, he noted the competitive dynamic inherent in two current major initiatives sponsored by both powers respectively.
China has mooted the new Asian Infrastructure Investment Bank (AIIB) which will lend to Asian countries for infrastructure development, while the US is the key driver of the Trans-Pacific Partnership (TPP) trade pact, which is in its final stages of negotiation. Singapore is part of both initiatives.
"It is an open secret that the US had reservations about the AIIB and discouraged its friends from participating. And on the TPP, some observers believe that the rules are being crafted to raise the hurdle for China to join," noted Mr Lee.
"Speaking as an Asian country and a participant in both, Singapore hopes that in the long-term, China will join the TPP, and the US and Japan will join the AIIB."
But PM Lee cautioned that another model of competition - one currently being played out in the territorial disputes in the East and South China Sea - would lead to tensions and bad outcomes in which every Asian country stands to lose.
Over the Senkaku/Diaoyu Islands, which both China and Japan claim, there is daily buzzing of ships and aircraft, with both countries testing the boundaries.
In the South China Sea, claimant states are taking unilateral actions in the disputed areas, drilling for oil and gas, reclaiming land, setting up outposts, and reinforcing their military presence, PM Lee noted.
"Actions provoke reactions. The US is responding to Chinese activities with increased over-flights and sailings near the disputed territories, to signal that it will not accept unilateral assertions of sovereignty in the South China Sea," he said. "Each country feels compelled to react to what others have done, in order to protect its own interests."
Non-claimant countries cannot take sides on the merits of the rival claims, he said, but they do have a stake in the maritime disputes, and in particular how they are handled.
"Every Asian country stands to lose if regional security and stability are threatened. Major sea and air lines of communications pass through the South China Sea. Every state whose trade passes through the South China Sea, or whose ships and aircraft use the South China Sea, has an interest in ensuring freedom of navigation and over-flight, including Singapore for whom the South China Sea is a vital life line," he explained.
"No country can renounce its claims, or sometimes even concede that a dispute exists, without paying a high political cost. But the consequence is that all sides harden their positions, and disputes become harder to disentangle.
"These maritime disputes are most unlikely to be solved anytime soon. And most likely will outlive the Shangri-La Dialogue. But they can and should be managed and contained. Because if the present dynamic continues, it must lead to more tensions and bad outcomes."
He also urged China and Asean to conclude ongoing talks on a Code of Conduct on the South China Sea as soon as possible, so as to break the vicious cycle and not let the disputes sour their broader relationship.
He emphasised that any outcome must be premised on international law to be legitimate and sustainable: "But even if we avoid a physical clash, if the outcome is determined on the basis of might is right, it will set a bad precedent. It may not lead immediately to a hot conflict, but it will be an unhappier and less sustainable position."
"In the long run, a stable regional order cannot be maintained by just force alone, but also requires consent and legitimacy in the international community, together with the balance of power."
Turning to the other tense regional relationship - that between Japan and its neighbours, China and South Korea - he urged "statesmanship and largeness of spirit" from all parties involved.
This year is the 70th anniversary of World War II, and "it is time to put the history behind us properly, like the Europeans have done," he said.
While Japan needs to acknowledge past wrongs and Japanese public opinion needs to be more forthright in rejecting outrageous interpretations of history by right-wing academics and politicians, PM Lee said Japan's neighbours "need to accept Japan's acknowledgements, and not demand that Japan apologise over and over again."
"The history of the war should not be used to put Japan on the defensive, or to perpetuate enmities to future generations," he said. "Only with largeness of heart can all sides move forward to reduce distrust and build up cooperation."
Resolution will help Japan be a normal country and play a more active role in the region, something most Southeast Asian nations want to see, said PM Lee.
In his wide-ranging speech, he also touched on the humanitarian crisis created by the human trafficking of Rohingyas and Bangladeshis, and the terrorism threat simmering in Southeast Asia.
Thousands of trafficked Bangladeshies and Rohingya Muslims, who are denied citizenship in Myanmar, have been stranded at sea in recent months. This has put huge pressure on countries like Thailand, Malaysia and Indonesia to accept them as refugees.
"The solution requires a response at the source and not just at sea," PM Lee said. "It also requires countries to act decisively against the traffickers, and put a stop to this organised racket."
